6th Pay Commission (2006-2008)

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6th Pay Commission (2006-2008)

Background

  • Established: October 2006
  • Chairman: B. N. Srikrishna
  • Objective: To recommend a revised structure for salaries, allowances, and pensions for central government employees, addressing inflation and modernizing the pay system.

Key Recommendations

  1. Minimum Salary:

    • Increased to ₹7,000 per month, up from ₹2,550 in the 5th Pay Commission.

  2. Pay Structure:

    • Introduced the Pay Band and Grade Pay system to simplify and rationalize pay scales.
    • Replaced the traditional pay scale structure with four Pay Bands.
    • Grade Pay was added to basic pay to determine total salary.

  3. Dearness Allowance (DA):

    • Continued the inflation-linked DA system with periodic reviews.

  4. Allowances:

    • Revised allowances like House Rent Allowance (HRA) and Transport Allowance (TA) based on location and inflation.
    • Introduced new allowances for remote areas and hardship zones.

  5. Pension Benefits:

    • Minimum pension increased to ₹3,500 per month.
    • Introduced the concept of parity in pension for pre- and post-2006 retirees.

  6. Performance-Linked Incentives:

    • Recommended incentives for performance in specific departments to encourage efficiency.

  7. Armed Forces:

    • Introduced special allowances and pay for defense personnel, including Military Service Pay (MSP).

  8. Pay Increments:

    • Annual increment fixed at 3% of the total pay (Basic Pay + Grade Pay).

Impact

  1. Substantial Pay Hike:

    • Salaries increased significantly across all levels, improving living standards.

  2. Simplified Pay Structure:

    • Pay Band and Grade Pay system simplified salary calculations and reduced anomalies in pay scales.

  3. Enhanced Pensions:

    • Parity in pensions addressed long-standing grievances of older retirees.

  4. Increased Government Spending:

    • The implementation cost exceeded ₹17,000 crore annually, adding to the fiscal burden.

  5. Boosted Employee Morale:

    • Improved pay, allowances, and retirement benefits increased satisfaction among employees.

Challenges

  1. Implementation Costs:
    • The recommendations placed a significant financial burden on both central and state governments.
  2. Disparities:
    • Some sections of employees, particularly the armed forces, expressed dissatisfaction with certain recommendations.
  3. Complexity of Allowances:
    • Numerous allowances created confusion and required further clarifications.

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